Thursday, 21 August 2008

innovation vs outsourcing

I returned from a customer visit recently, where the operational IT landscape is outsourced completely to IBM. In line with industry trends, the outsourcer was engaged to contain costs of running an IT department. Again, the perception of IT as a cost centre led to a strategic outsourcing decision. This perception and subsequent decision must be reversed if innovation and value-based IT services are to be delivered, services which align to the customer needs, services which provide agility to dynamics of business.

In this case, the topic of innovation was discussed. The customer wanted greater insight into the future of their IT function, to allow greater control over IT budgets and drive optimization projects leading to improved cost/efficiency.

Of course, this is in the customer's interest. But is it in the outsourcer's best interest to allow such optimization to occur? It is unusual to find such elements written into the outsourcing contracts today, but perhaps as CIOs become better equipped to manage strategic outsourcer relationships - they can place themselves more firmly in the driving seat.

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